#AceFinanceNews – UNITED STATES – Dec.03 – Last week, total US debt was a meager $17,963,753,617,957.26. Two days later, as updated today, on Black Friday, total outstanding US public debt just hit a new historic level which probably would be better associated with a red colour: as of the last work day of November, total US public debt just surpassed $18 trillion for the first time, or $18,005,549,328,561.45 to be precise, of which debt held by the public rose to $12,922,681,725,432.94, an increase of $32 billion in one day.
Original Post: December 2, 2014
Look Who Just Turned 18
It also means that total US debt to nominal GDP as of Sept 30, which was $17.555 trillion, is now 103%. Keep in mind this GDP number was artificially increased by about half a trillion dollars a year ago thanks to the “benefit” of R&D and intangibles. Without said definitional change, debt/GDP would now be about 106%.
Ponzi: Treasury Issues $1T in New Debt in 8 Weeks—To Pay Old Debt
The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise themoney to pay off Treasury securities that were maturing and to cover new deficit spending by the government.
During those eight weeks, Treasury took in $341,591,000,000 in revenues. That was a record for the period between Oct. 1 and Nov. 25. But that record $341,591,000,000 in revenues was not enough to finance ongoing government spending let alone pay off old debt that matured.
The only way the Treasury could handle the $942,103,000,000 in old debt that matured during the period plus finance the new deficit spending the government engaged in was to roll over the old debt into new debt and issue enough additional new debt to cover the new deficit spending.
This mode of financing the federal government resembles what the Securities and Exchange Commission calls a Ponzi scheme. “A Ponzi scheme,” says the Securities and Exchange Commission, “is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors,” says the Securities and Exchange Commission.
“With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue,” explains the SEC. “Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.”
The other side of the coin is that US inflation has been understated by more than 3% for the last twenty years. That means US GDP was overstated by at least 3% for each of the last twenty years. Correcting that GDP for 3% over 20 years cuts it in half. So real US GDP is only about $8.5 trillion instead of the assumed $17 trillion. That makes US debt to GDP ratio approach Japan’s even if we just omit the unfunded liabilities. Keep buying those US bonds – they are backed by the best lies of the Fed and the US BLS
$500 billion was added to the US GDP on July 1, 2013, thanks to itunes and other intangibles.
US GDP Will Be Revised Higher By $500 Billion Following Addition Of “Intangibles” To Economy
Federal Reserve Confirms Biggest Foreign Gold Withdrawal In Over Ten Years